A Manager Has Prepared a Forecast of Expected Aggregate Demand

question 35

Essay

A manager has prepared a forecast of expected aggregate demand for the next six months.Develop an aggregate production plan to meet this demand given this additional information: A level production rate of 100 units per month will be used.Backorders are allowed,and they are charged at the rate of $8 per unit per month.Inventory holding costs are $1 per unit per month.Determine the cost of this plan if regular time cost is $20 per unit and beginning inventory is zero.
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Definitions:

FICA

FICA stands for the Federal Insurance Contributions Act and refers to the taxes collected to fund Social Security and Medicare programs in the United States.

SUTA

A state-level tax paid by employers to fund the state’s unemployment insurance program.

FUTA

The Federal Unemployment Tax Act, which imposes a payroll tax on employers to fund state workforce agencies.

FICA

Refers to the Federal Insurance Contributions Act tax, which is a United States federal payroll tax imposed on both employees and employers to fund Social Security and Medicare.